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प्रश्न
Study the following case/situation and express your opinion:
A company stated in its prospectus that it has been making profits since the last 5 years. However, Mr. X. an investor found out that two years back the company had not made any profit. The prospectus was filed with the ROC on 1 st Jan 2017 and was issued to the public on 10th Feb 2018.
a) Can Mr. X state that there was a misstatement in the prospectus?
b) If found guilty which two types of liability will the company and its officers face?
c) Can the prospectus be valid for issue to the public on 10th Feb 2018?
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उत्तर
(a) Mr. X can state that there was a misstatement in the prospectus.
(b) If found guilty the company and its officers will face civil liability and criminal liability for misstatement in the prospectus.
(c) Prospectus cannot be valid for the issue to the public on 10th February 2018.
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संबंधित प्रश्न
Select the correct answer from the option given below and rewrite the sentence.
_________ clause states the amount of Authorised capital with which the company is registered.
Select the correct answer from the option given below and rewrite the sentence.
For making multiple issues of shares within a year, a company can prepare a ________ Prospectus.
Write a word or a term or a phrase which can substitute the following statement:
Document which states the limits within which a company has to operate.
Write a word or a term or a phrase that can substitute the following statement:
The document is subordinate to the Memorandum of Association.
Write a word or a term or a phrase which can substitute the following statement:
Term used for acts beyond the scope of Memorandum of Association.
Write a word or a term or a phrase which can substitute the following statement:
Clause which describes the main activities a company can undertake.
Write a word or a term or a phrase which can substitute the following statement:
Prospectus attached with every share application form.
Write a word or a term or a phrase which can substitute the following statement:
Prospectus used for multiple issue of shares within a year.
State whether the following statement is True or False:
Memorandum of Association and Articles of Association is prepared at the time of incorporation of a company.
State whether the following statement is True or False:
Memorandum of Association describes the nature and character of the company.
State whether the following statement is True or False:
Memorandum need not have a Liability Clause.
State whether the following statement is True or False:
Memorandum contains rules and regulations for the internal management of a company.
State whether the following statement is True or False:
Every subscriber who signs the Memorandum must also sign the Articles.
State whether the following statement is True or False:
Letter of offer is issued at the time of Rights Issue.
Select the correct option from the given options:
| Group A | Group B |
| ___________ | Memorandum of association. |
Explain the following term/concept.
Name clause
Explain the following term/concept.
objective clause
Explain the following term/concept.
Liability clauses
Study the following case/situation and express your opinion:
A public limited company has issued all the shares mentioned in its Memorandum as Authorized Capital. Now the Company wants to make a public issue of 10,000 shares at face value of Rs 100 per share, to raise more funds for its expansion activities :
(a) Which clause of Memorandum needs to be altered?
(b) In which meeting the alteration can be approved?
(c) Which document should the company issue to invite the public to buy its shares?
Distinguish between the following:
Memorandum of association and articles of association.
